A new wave of layoffs that began this fall in Serbia’s private manufacturing sector is now spreading to the state-owned defense industry, where factories are preparing lists of workers to be declared redundant, according to Ranka Savić, president of the Association of Free and Independent Trade Unions (ASNS).
Military analyst Aleksandar Radić confirmed that the situation in Serbia’s weapons and ammunition factories is dire, with no funds available due to the ongoing export ban, despite warehouses being full. “Layoff programs are being prepared across the defense sector—100, 200, even 300 workers in some plants will be declared surplus,” Savić told N1, without naming specific factories.
She said the lists are being made to cut operational costs, adding that the wave of dismissals reflects Serbia’s worsening financial situation.
Radić explained that the core problem is not a lack of production or orders but the ban on arms and ammunition exports, imposed by President Aleksandar Vučić on June 23 following criticism over Serbian ammunition reaching both Israel and Ukraine through intermediaries. “Layoffs are inevitable because the crisis is deep. And if they happen, those who supported the protests will be the first to go,” Radić said.
He noted that weapons and ammunition output remains high and that many factories had already received advance payments but are unable to deliver goods due to the export freeze. Sources confirmed that warehouses are full and that the products are not being shipped.
Zastava Oružje in the most difficult position
Radić identified Zastava Oružje in Kragujevac as the worst affected, saying its survival depends on government projects. He criticized the Ministry of Defense’s plan for Zastava to produce a 6.5 mm rifle, a non-standard caliber that “no one in the world uses,” making it commercially unviable.
Zastava’s union leader Aleksandar Tadić said in late October that salary payments are at risk due to the export ban. The company cannot even export hunting and sports weapons to the United States, causing unsold stock to pile up.
Earlier this year, Zastava’s trade union publicly supported student protests demanding a fairer, more accountable society.
Other factories also affected
Radić also pointed to Krušik (Valjevo) and Sloboda (Čačak) as factories facing serious difficulties. Both are export-oriented, but their recent strong financial results—driven by pre-ban exports to Ukraine and Israel—may help them endure temporarily.
In 2024, Sloboda Čačak’s revenue nearly doubled compared to 2022, while Krušik’s rose from 5.9 billion dinars to 18.88 billion dinars over the same period.
Vučić offers ammunition to the EU
When announcing the export ban in June, President Vučić said that 24,000 people directly and 150,000 indirectly depend on the defense industry. “I won’t leave 150,000 people without work. My job is to find them markets,” he said, adding that he had opened Asian and U.S. markets for Serbian arms.
In an interview with German magazine Cicero on October 30, Vučić said that Serbia is now ready to export ammunition to the European Union, stating that “Serbia is prepared to offer everything it has to its friends in Europe,” noting that the country’s warehouses are full. He added that European buyers can use the ammunition as they wish, even if it ends up in Ukraine.
On November 5, Vučić spoke by phone with Ukrainian President Volodymyr Zelensky, though little was disclosed about the conversation. Both sides agreed there was room for international cooperation and support.
Radić warned, however, that even if Serbia quickly obtains export licenses, six months of halted exports have already caused irreversible damage to the defense sector.
Employment in the defense industry
According to publicly available 2024 financial reports, Serbia’s main defense companies collectively employ more than 10,000 workers:
- Sloboda Čačak – 2,400 employees
- Zastava Oružje – 2,285
- Krušik Valjevo – 2,097
- Milan Blagojević – Namenska Lučani – 1,636
- Prvi Partizan Užice – 1,550
- Prva Iskra Barič – 169
Despite strong production potential, analysts warn that continued export restrictions could push Serbia’s defense industry into its worst crisis in decades.
